Private Debt Spotlight

VOLUME 2, ISSUE 8 ■ DECEMBER 2017

alternative assets. intelligent data. PRIVATE DEBT SPOTLIGHT

FUNDS IN MARKET IN THIS ISSUE 324 A record 324 private debt funds are currently in market, seeking a combined $153bn in capital commitments. In this feature we put these funds under the microscope to gauge where this capital is FEATURE 2 headed. Funds in Market Find out more on page 2

FEATURE 5 Management Fees

INDUSTRY NEWS 6 MANAGEMENT FEES Average management fees for private debt funds have THE FACTS been on a downward trajectory since the highs for ■ Leading Fund 7 vintage 2013 funds, dropping to a mean of 1.52% for vintage 2017 funds. Here we provide the latest figures Administrators and trends. ■ Leading Fund 8 Auditors Find out more on page 5 ■ Leading Law Firms 9

CONFERENCES 10

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With 2018 just around the corner, we take a look at the private debt funds currently in market by target size, geographic focus and time spent on the road.

s investors search for yield and greater Over a third (104) of the vehicles on the CAPITAL TARGETED BY INVESTMENT Aportfolio diversification, it is fitting road are being raised by first-time private STRATEGY to see an uptick in private debt offerings debt managers, which can be attributed Direct lending leads the way in terms of in market looking to attract investor to the growth of the asset class and the both number of funds (152) and aggregate commitments. As at November 2017, increase of traditional private equity firms capital targeted ($63bn), representing there are a record 324 private debt funds raising their debut private debt fund as almost half of the funds being raised and in market seeking a combined $153bn they look to gain a foothold in an asset 41% of total capital sought by private debt in capital commitments (Fig. 1). This class that is increasingly being considered funds. Mezzanine funds represent the represents a 12% increase in the number by a broad range of institutional investors. next largest number of funds in market, of funds raising capital and a 21% rise Collectively, these first-time funds are but only account for 15% of total targeted in targeted capital compared with the seeking $26bn. capital. Nearly half of the capital targeted beginning of 2017. by mezzanine funds is accounted for by GS

Fig. 1: Private Debt Funds in Market by Fund Type Fig. 2: Private Debt Funds in Market by Primary Geographic (As at November 2017) Focus (As at November 2017) 160 152 200 140 180 172 120 160 100 140 No. of Funds No. of Funds 80 63 62 Raising 120 Raising 60 45 94 38 100 40 36 Aggregate Capital Aggregate Capital 23 24 80 77 19 Targeted ($bn) Targeted ($bn) 20 10 2 2 60 0 39 42 40 33 20 Debt 11

Direct 8 Debt Venture Lending Special Situations

Distressed 0 Mezzanine North Europe Asia Rest of World Fund of Funds America Fund Type Primary Geographic Focus Source: Preqin Private Debt Online Source: Preqin Private Debt Online

Fig. 3: Largest Private Debt Funds in Market (As at November 2017) Fund Firm Target Size (bn) Fund Type Geographic Focus 3G Special Situations Fund V 3G Capital 10.0 USD Special Situations North America Goldman Sachs Merchant Banking GS Mezzanine Partners VII 10.0 USD Mezzanine North America Division GSO Capital Solutions Fund III GSO Capital Partners 6.5 USD Distressed Debt North America Apollo European Principal Finance Fund III Apollo Global Management 4.0 USD Distressed Debt Europe Park Square Capital SMBC JV Park Square Capital Partners 3.4 EUR Direct Lending Europe OCM European Principal Opportunities Fund Oaktree Capital Management 3.3 EUR Distressed Debt Europe IV Steadfast Alcentra Global Credit Fund Alcentra Group 3.0 USD Direct Lending North America Ares Private Credit Solutions Ares Management 2.5 USD Direct Lending North America CVI Credit Value Fund IV CarVal Investors 2.0 USD Distressed Debt North America KKR Direct Lending III KKR 2.0 USD Direct Lending North America

Source: Preqin Private Debt Online

2 Private Debt Spotlight | December 2017 © Preqin Ltd. 2017 / www.preqin.com FUNDS IN MARKET

Mezzanine Partners VII, which is targeting an aggregate $7.8bn. This represents a 50% the current record of $5bn, which is held $10bn. Despite distressed debt comprising increase in the number of Rest of World- by 3G Capital’s vintage 2014 special just 14% of the total number of funds in focused funds raising capital compared situations fund. GS Mezzanine Partners VII market, these funds are seeking $38bn, a to the start of 2017. It is also more than would be the second largest mezzanine quarter of the targeted total capital. The double the amount of targeted capital at fund closed if the target of $10bn is average target size for distressed debt that time ($3.0bn). reached. The vehicle is part of Goldman funds is $758mn compared to $391mn and Sachs Merchant Banking Division’s series $248mn for direct lending and mezzanine MANAGER EXPERIENCE of mezzanine funds, which also raised the strategies respectively. The average The private debt market is still in an $13bn GS Mezzanine Partners V fund. size of special situations vehicles is also expansionary stage, as evidenced by 53% noteworthy at $510mn. of funds in market being a manager’s first OUTLOOK or second debt fund. In addition, only With 324 private debt funds in market as GEOGRAPHIC FOCUS 9% of debt funds in market are seeking at November 2017, targeting an aggregate There are currently 172 North America- $1bn or more (Fig. 4), compared to 17% of $153bn, there are plenty of opportunities focused funds in market, targeting an private equity funds for example. for institutional investors to deploy capital. aggregate $94bn (Fig. 2); it remains the The asset class continues to flourish, with most sought-after region in terms of both However, experienced debt managers with LP appetite for private debt exposure number of funds and aggregate capital track records are able to enter the market throughout the risk spectrum leading fund targeted. Seventy-seven funds in market with sizeable offerings. The 10 largest managers to launch new and diversified have a primary focus on Europe, targeting funds in market, as seen in Fig. 3, make funds. Due to the maturity of private debt a total of $39bn (€35bn). Not much has up 31% of total capital sought by private in North America, the region will likely changed for the region, as this is only a debt funds ($47bn). The top two funds are remain the focus of the largest number slight increase from the 73 funds that each seeking $10bn in capital for special of funds in market, as well as the largest targeted $33bn (€30bn) in January 2017. situations and mezzanine strategies. 3G amount of capital being targeted. There are 33 Asia-focused funds in market, Special Situations Fund V would be the seeking a collective $11bn, while 42 Rest of largest special situations fund to close if its World-focused funds are currently seeking target is reached, potentially surpassing

Fig. 4: Private Debt Funds in Market by Target Size Fig. 5: Time Spent on the Road by Private Debt Funds in Market (As at November 2017) (As at November 2017) 100% 90% 20% 25% More than 24 9% 36% 18% 80% Months Less than $100mn 8% 70% 12% 19-24 Months 20% $100-249mn 60% 24% 20% 20% 13-18 Months $250-499mn 50%

$500-999mn 40% 12% 7-12 Months

Proportion of Funds Proportion 30% 37% 33% 29% $1bn or More 1-6 Months 20% 24% 10% 24% 11% 8% 12% 0% All Funds First-Time Non-First-Time Funds Funds Source: Preqin Private Debt Online Source: Preqin Private Debt Online

PRIVATE DEBT ONLINE

Private Debt Online is the leading source of data and intelligence on the growing private debt industry and tracks all aspects of the asset class, including fund managers, fund performance, fundraising, institutional investors and more.

Constantly updated by our team of dedicated researchers, Private Debt Online represents the most complete source of industry intelligence available today, with global coverage and all fund managers and investors profiled.

Get in touch today to arrange a demo of Private Debt Online: : [email protected] | : www.preqin.com/privatedebt

3 Private Debt Spotlight | December 2017 © Preqin Ltd. 2017 / www.preqin.com PREQIN GLOBAL DATA COVERAGE alternative assets. intelligent data.

FUNDS OPEN TO INVESTORS FUNDS WITH FIRMS FUNDS DEALS & EXITS ALTERNATIVES INVESTMENT MONITORED PERFORMANCE COVERAGE 28,874 51,215 18,946 14,946 26,798 297,257

PRIVATE NATURAL HEDGE FUNDS REAL ESTATE INFRASTRUCTURE PRIVATE DEBT EQUITY* RESOURCES 6,848 5,256 6,062 3,215 3,048 2,966 INVESTOR Active Active Active Active Active Active COVERAGE Private Equity Hedge Fund Real Estate Infrastructure Private Debt Natural Resources LPs Investors LPs LPs Investors Investors

FUND 18,213 24,751 6,756 1,238 2,407 1,823 COVERAGE Private Equity Hedge PE Real Estate Infrastructure Private Debt Natural Resources Funds Funds Funds Funds Funds Funds

FIRM 12,279 9,109 4,399 534 1,550 1,013 Hedge Fund PE Real Estate Infrastructure Private Debt Natural Resources COVERAGE Private Equity Firms Firms Firms Firms Firms Firms

PERFORMANCE 5,960 17,507 1,736 247 820 516 COVERAGE Private Equity Hedge PE Real Infrastructure Private Debt Natural Resources Funds Funds Estate Funds Funds Funds Funds

FUNDRAISING 2,087 15,668 1,173 176 367 369 COVERAGE Private Equity Hedge PE Real Infrastructure Private Debt Natural Resources Funds Funds Estate Funds Funds Funds Funds BUYOUT VENTURE CAPITAL REAL ESTATE INFRASTRUCTURE PRIVATE DEBT DEALS & EXITS 145,592 COVERAGE 80,351 45,169 26,145 7,066 Venture Capital Deals Buyout Deals and Exits Real Estate Deals Infrastructure Deals Private Debt Deals and Exits

Alternatives Investment Consultants Funds Terms Coverage: Analysis Best Contacts: Carefully Selected from Coverage: Based on Data for Around our Database of over 588 16,888 428,355 Consultants Tracked Funds Contacts + PLUS THE PREQIN DIFFERENCE Comprehensive coverage of: + Over 390 research, support and development staff + Placement Agents + Dry Powder + Global presence - New York, London, Singapore, San Francisco, + Fund Administrators + Compensation Hong Kong, Manila and Guangzhou + Law Firms + Plus much more... + Depth and quality of data from direct contact methods + Debt Providers + Unlimited data downloads + The most trusted name in alternative assets

*Private equity includes buyout, growth, venture capital, turnaround, private equity fund of funds, private equity secondaries, direct secondaries, balanced, hybrid, hybrid fund of funds, PIPE, co-investment and co-investment multi-manager funds. 2015 Annual CAIA Corporate �e�o�ni� on Award Winner As at 1st November 2017 MANAGEMENT FEES MANAGEMENT FEES

The 2017 Preqin Private Capital Fund Terms Advisor compiles data from over 3,300 private capital funds to provide detailed insight into fund terms and conditions within the industry. Here we look at private debt management fees and analyze the current trends.

verage management fees for private Fig. 2 shows average management fees AVERAGE INVESTMENT PERIOD Adebt funds are at their lowest point for all private debt strategies for vintages MANAGEMENT FEE OF PRIVATE DEBT across the last 10 vintage years, with the 2008-2017 combined, illustrating the FUNDS (VINTAGE 2008-2017 FUNDS CLOSED) median for vintage 2017 funds at 1.50%, fee gap between direct lending and the compared to 1.75% for vintage 2016 funds. other major private debt strategies which 1.80% Downward pressure on fees has been a typically carry equity components. 1.75% theme across alternatives for years, as investors continue to push for greater Direct lending funds, which typically alignment of interests with their fund account for the largest number of funds managers. Management fees for private in market and aggregate capital targeted, debt vehicles have traditionally ranged tend to offer the lowest average fees, from 1% to over 2% within the investment with a mean of 1.57% and a median of period and tend to lower thereafter, as 1.50%. Direct lenders generally offer lower Mean Median deployment costs are offset by the more targeted returns than distressed debt or predictable costs of fund monitoring and mezzanine managers, which can command administration. a more sizeable premium for management. capital remains high among lenders of similar strategies. However, manager As seen in Fig. 1, both mean and median Venture debt funds have the highest mean specialization in certain industries or management fees for private debt funds and median management fees over the regions could see these specialists able to have been moving down since the highs vintage years examined, while special hold off fee contraction due to increased for vintage 2013 funds, dropping to a mean situations funds typically charge a median demand for their particular expertise. of 1.52% for 2017 vintage funds. This could of 2.00%. Distressed debt and mezzanine be a response to more and more managers funds of vintage 2008-2017 both share a launching vehicles in recent years, median of 1.75%. combined with the increasingly efficient practices and lending platforms in place to It is likely that management fees will help keep costs low and preserve spreads. continue to see contraction in the near term, as competition for institutional

Fig. 1: Average Investment Period Management Fee of Private Fig. 2: Average Investment Period Management Fee of Private Debt Funds by Vintage Year Debt Funds by Fund Type (Vintage 2008-2017 Funds Closed) 2.5% 3.0%

2.00% 2.07% 2.00% 2.50% 1.88% 2.00% 2.5% 2.0% 1.76% 1.79% 1.76% 2.30% 1.81% 1.80% 1.75% 1.80% 1.79% 1.75% 1.75% 1.75% 2.00% 1.70% 2.0% 1.89% 1.86% 1.75% 1.52% 1.82% 1.75% 1.75% 1.5% 1.50% 1.57%1.50% 1.5%

1.0% 1.0% Proportion of Funds Proportion

0.5% 0.5%

Investment Period Management Fee Period Investment 0.0% 0.0% Direct Distressed Mezzanine Special Venture Debt 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Lending Debt Situations Vintage Year Fund Type Mean Median Mean Median Source: The 2017 Preqin Private Capital Fund Terms Advisor Source: The 2017 Preqin Private Capital Fund Terms Advisor

5 Private Debt Spotlight | December 2017 Preqin Ltd. 2017 / www.preqin.com INDUSTRY NEWS INDUSTRY NEWS

In this month’s industry news, we examine private debt deal activity, recently closed funds and investor mandates.

$2.5bn $63bn $1.2bn 16% was secured by Glendon Aggregate capital targeted by Average target size of of total capital targeted by Opportunities Fund 11, the direct lending funds in market, distressed debt funds in market private debt funds in market largest distressed debt fund the most of any individual debt focused on Europe, the largest is sought by special situations closed in Q4 and the third strategy. for any fund strategy or region. funds, of which there are 37. largest in 2017.

PRIVATE DEBT DEAL ACTIVITY RECENTLY CLOSED FUNDS INVESTOR MANDATES

At the midpoint of Q4 2017, Private Debt At least 17 private debt funds have held Private debt funds continue to see more Online has tracked 68 private debt deals an interim or final close in Q4 2017 as at 8 investor attention than ever before. Here, completed globally since the start of the November 2017, with the largest known we take a look at a selection of recent quarter. There have been a total of 630 fund closure being HPS Specialty Loan investor updates from Private Debt debt financing deals recorded in 2017 YTD, Fund 2016, a direct lending fund which Online: with an aggregate deal value of $86bn, hit its hard cap of $4.5bn in October 2017. ■■ KGAL Real Investment is considering including a total debt-issued value of The vehicle will focus on opportunities in investing in private debt in the next $31bn. North America and Europe, and has issued 12 months, with a focus on aviation $363mn in known debt. finance. The company is based in According to Preqin’s private debt fund Germany and currently has €21.5bn manager survey conducted in November Including HPS, there have been four fund in AUM. 2017, deal pricing and deal flow are closures in the quarter of more than $1bn, ■■ ABL Life Insurance, based in South expected to be the two largest challenges with CVI Credit Value Fund IV from CarVal Korea, will consider gaining exposure facing the industry in the next 12 months, Investors securing more than $2.3bn at to private debt via separate accounts as managers are feeling pressure to put its first close. At the other end of the fund in the next 12 months. large stores of dry powder to work in the size spectrum, first-time debt manager ■■ Previndai, the €10bn Italy-based year ahead. Additionally, nearly 40% of Turning Rock Partners has held a first public pension fund, is considering managers suggest that lending terms have close on $4mn for Turning Rock Fund I, investing in private debt funds in the become more borrower friendly in 2017 which is seeking distressed and illiquid next 12 months as part of its asset versus 2016. opportunities in the US. allocation strategy. Previndai has not yet set allocations or an investment One venture debt fund has closed recently: strategy. Multiplier Capital’s second fund, Multiplier ■■ Credit Suisse Pension Fund will be Capital II, has secured $266mn at its final investing in private debt in the next close and will seek opportunities in growth 12 months. It plans to invest with industries, with a particular focus on both new and existing managers. digital media, e-commerce, consumer web applications and cybersecurity.

SHARE YOUR NEWS

Do you have any news you would like to share with the readers of Spotlight? Perhaps you’re about to launch a new fund, have implemented a new investment strategy, or are considering investments beyond your usual geographic focus?

Send your updates to [email protected] and we will endeavour to publish them in the next issue.

6 Private Debt Spotlight | December 2017 © Preqin Ltd. 2017 / www.preqin.com discount code Use PREQIN for

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Associate Sponsor: Exhibitor Sponsors:

www.imn.org/greece - For sponsorship opportunities, contact Chris Arnold at [email protected] or +1 212-901-0544 THE FACTS LEADING FUND ADMINISTRATORS We take a look at the prominent fund auditors servicing private debt funds and sample assignments.

Fig. 1: Prominent Fund Administrators Servicing Private Debt Funds, Funds Closed All-Time No. of Known Firm Headquarters Sample Assignments PD Funds OSP Value Fund II (Distressed Debt, $600mn); Innovatus Flagship Fund I SS&C GlobeOp Windsor, US 77 (Direct Lending, $750mn)* Carlyle Strategic Partners IV (Distressed Debt, $2.5bn); European Middle State Street Boston, US 54 Market Private Debt Fund (Direct Lending, €750mn)* Benefit Street Partners Special Situations Fund (Distressed Debt, $750mn); Citco Fund Services New York, US 40 Crayhill Principal Strategies Fund (Special Situations, $700mn)* CapitalSpring Investment Partners V (Direct Lending, $725mn); 3G Special SEI Investments Oaks, US 35 Situations Fund V (Special Situations, $10bn)* Cerberus Institutional Partners VI (Distressed Debt, $4bn); Pemberton UK J.P. Morgan Fund Services New York, US 33 Mid-Market Direct Lending Fund (Direct Lending, £500mn)* THL Credit Direct Lending Fund III (Direct Lending, $511mn); Capitala U.S. Bancorp Fund Services Milwaukee, US 27 Private Credit Fund V (Direct Lending, $350mn)* VPC Specialty Finance Fund II (Direct Lending, $500mn)*; RPK Capital Northern Trust Fund Administration Chicago, US 25 Aviation Investment Fund I (Special Situations, $300mn)* Enlightenment Capital Solutions Fund II (Direct Lending, $147mn); Pelham PEF Services West Orange, US 17 S2K SBIC (Mezzanine, $105mn)* TGAM Churchill Middle Market Senior Loan Fund (Direct Lending, BNY Mellon New York, US 14 $500mn)*; Izurium European Credit Fund (Direct Lending , €150mn) Solace Capital Partners Fund (Special Situations, $576mn); VSS Structured Gen II Fund Services, LLC New York, US 14 Capital III (Mezzanine, $300mn)* *Denotes target size. Source: Preqin Private Debt Online

Fig. 2: Prominent Fund Administrators Servicing Private Debt Funds by Fund Size, Funds Closed 2015-2017 Less than $100mn $100-499mn $500-999mn $1bn or More Abax Corporate Services Citco Fund Services Gen II Fund Services, LLC Citco Fund Services Aztec Group Citi Fund Services SEI Investments JP Morgan Fund Services BNP Paribas Securities Services Gen II Fund Services, LLC SS&C GlobeOp SEI Investments SS&C GlobeOp PEF Services State Street SS&C GlobeOp Zook Dinon SS&C GlobeOp U.S. Bancorp Fund Services State Street

Source: Preqin Private Debt Online

Fig. 3: Prominent Fund Administrators Servicing Private Debt Funds by Fund Manager Location, Funds Closed 2015-2017 North America Europe Asia & Rest of World Gen II Fund Services, LLC Alter Domus Alter Domus SEI Investments BNP Paribas Securities Services Cim Fund Services SS&C GlobeOp CACEIS Computer Age Management Services State Street Sanne Group Langham Hall UK Services U.S. Bancorp Fund Services SS&C GlobeOp State Street

Source: Preqin Private Debt Online

8 Private Debt Spotlight | December 2017 © Preqin Ltd. 2017 / www.preqin.com THE FACTS LEADING FUND AUDITORS

Using data from Preqin’s Private Debt Online, we examine the leading fund auditors currently servicing private debt funds.

Fig. 1: Prominent Fund Auditors Servicing Private Debt Funds, Funds Closed All-Time No. of Known Firm Sample Assignments Headquarters PD Funds 3G Special Situations Fund V (Special Situations, $10bn)*; Cerberus PricewaterhouseCoopers London, UK 228 Institutional Partners VI (Distressed Debt, $4bn) Amsterdam, Varde Fund XII (Distressed Debt, $1.74bn); Crestline Opportunity Fund III KPMG 174 Netherlands (Special Situations, $1.25bn)* Carlyle Strategic Partners IV (Distressed Debt, $2.5bn); Capzanine IV EY London, UK 170 (Private Debt) (Direct Lending, €800mn)* Riverside Strategic Capital Fund I (Direct Lending, $418mn); European Deloitte New York, US 127 Middle Market Private Debt Fund (Direct Lending, €750mn)* GCG Investors IV (Mezzanine, $275mn); Medley Opportunity Fund III RSM Chicago, US 79 (Direct Lending, $800mn)* PA Direct Credit Opportunities Fund II (Mezzanine, $740mn); European Grant Thornton Chicago, US 29 Distressed Fund III (Distressed Debt, €500mn)* AMERRA Agri Fund III (Direct Lending, $820mn); Sandton Credit Solutions EisnerAmper New York, US 24 Fund IV (Special Situations, $600mn) Prospect Credit Strategies Fund (Direct Lending, $1bn)*; Brevet Direct BDO London, UK 23 Lending - Intermediate Duration Fund (Direct Lending, $500mn)* Ironwood Mezzanine Fund IV (Mezzanine, $400mn)*; Closed Loop Fund CohnReznick New York, US 15 (Direct Lending, $150mn)* H.I.G. Bayside Loan Opportunity Fund IV (Distressed Debt, $1.1bn); Crowe Horwath New York, US 14 Peninsula Fund VI (Mezzanine, $402mn)

*Denotes target size. Source: Preqin Private Debt Online

Fig. 2: Market Share of Big Four Fund Auditors Servicing Private Fig. 3: Market Share of Big Four Fund Auditors Servicing Private Debt Funds by Fund Size, Funds Closed 2016-2017 Debt Funds by Fund Manager Location, 2016-2017

$1bn or More 12% 30% 12% 42% North America 11% 22% 16% 19%

$500-999mn 8% 27% 27% 19%

Europe 5% 14% 26% 38%

$100-499mn 14% 20% 14% 18%

Asia & Rest of World 20% 40% 10% Less than $100mn 4% 4% 38% 13%

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Proportion of Funds Using a Big Four Auditor Proportion of Funds Using a Big Four Auditor Deloitte EY KPMG PricewaterhouseCoopers Deloitte EY KPMG PricewaterhouseCoopers Source: Preqin Private Debt Online Source: Preqin Private Debt Online

We list the leading law firms in the private debt industry and sample funds they have worked on.

Fig. 1: Leading Law Firms in Private Debt Fund Formation No. of Known Aggregate Capital PD Funds Raised by Known Firm Headquarters Sample Private Debt Funds Closed in 2017 Closed in PD Funds Closed in 2017 2017 ($bn) HPS Specialty Loan Fund 2016 (Direct Lending, $4.5bn); Fried Frank New York, US 3 9.8 Permira Credit Solutions Fund III (Direct Lending, €2.9bn) Cerberus Institutional Partners VI (Distressed Debt, Schulte Roth & Zabel New York, US 4 9.0 $4bn); Benefit Street Partners Special Situations Fund (Distressed Debt, $750mn) Twin Brook Capital Partners Direct Lending Fund II (Direct Ropes & Gray Boston, US 5 5.1 Lending, $1.6bn); PIMCO Corporate Opportunities Fund II (Distressed Debt, $1.5bn) PA Direct Credit Opportunities Fund II (Mezzanine, Simpson Thacher & Bartlett New York, US 2 3.2 $740mn); Carlyle Strategic Partners IV (Distressed Debt, $2.5bn) Cross Ocean Partners European Special Situations II Macfarlanes London, UK 3 2.7 (Special Situations, $1.2bn) Marlin Equity Partners V (Special Situations, $2.5bn); Kirkland & Ellis Chicago, US 2 2.5 Crescent Asia Consumer & Special Opportunities Fund (Special Situations) Akin Gump Strauss Hauer & Feld New York, US 1 2.4 Castlelake V (Distressed Debt, $2.4bn) Cerberus Levered Loan Opportunities Fund III (Direct Lowenstein Sandler Roseland, US 1 2.1 Lending, $2.1bn)

Source: Preqin Private Debt Online

Fig. 2: Leading Law Firms Involved in Private Debt Funds in Market (As at October 2017) Aggregate Capital No. of Known Targeted by Firm Headquarters PD Funds in Sample Private Debt Funds in Market Known PD Funds Market in Market ($bn) KKR Private Credit Opportunities Partners II (Mezzanine); Simpson Thacher & Bartlett New York, US 3 6.5 GSO Capital Solutions Fund III (Distressed Debt, $6.5bn) Women Entrepreneurs Debt Fund (Direct Lending, Debevoise & Plimpton New York, US 5 5.2 $150mn); Park Square Capital Credit Opportunities III (Direct Lending, $1bn) Apollo European Principal Finance Fund III (Distressed Akin Gump Strauss Hauer & Feld New York, US 3 5.0 Debt, $4bn); Crayhill Northbrook Fund (Special Situations) New Mountain Guardian Partners II (Direct Lending, Schulte Roth & Zabel New York, US 7 3.1 $750mn); African Credit Opportunities Fund 1 (Mezzanine, $200mn) Equita Private Debt Fund (Direct Lending, €150mn); Dechert London, UK 8 2.8 NewStar Dartmouth Street Senior Loan Fund (Direct Lending, $500mn) Avenue Asia Special Situations Fund (Distressed Debt, Paul, Weiss, Rifkind, Wharton & New York, US 3 2.8 $500mn); Paulson Strategic Partners Fund (Distressed Garrison Debt, $1.5bn) Pemberton Strategic Credit Opportunities Fund (Special Paul Hastings New York, US 2 2.0 Situations, €1bn); European Middle Market Private Debt Fund (Direct Lending, $750mn) Foley & Lardner Boston, US 1 1.8 White Oak Yield Spectrum Fund (Direct Lending, $1.8bn) Medley Opportunity Fund III (Direct Lending, $800mn); Gibson, Dunn & Crutcher Los Angeles, US 3 1.7 Arrowhead Mezzanine Fund III (Mezzanine, $400mn)

Source: Preqin Private Debt Online

10 Private Debt Spotlight | December 2017 © Preqin Ltd. 2017 / www.preqin.com Source new investors for funds Identify new investment opportunities Conduct competitor and market analysis Track firms with capital available to invest Develop new business

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